September 28, 2019

Person-to-person loans through History

It is perhaps no wonder that person-to-person loans are the oldest form of loans, they are the simplest ones! It’s all about people who need money being put in contact with those who have money.

Conceivable that this is a historically unregulated market

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It is conceivable that this is a historically unregulated market, but this is not the case.

As early as the 18th century, Jonathan Swift (the satirist behind Gulliver’s Travels) was one of the founders of “the Irish Loan funds” (More facts), which linked private individuals in need of small sums of money with private individuals who had money, almost like today’s peer-to-peer lending but without the internet. Around 1850, over 20% of Ireland’s population were borrowers in the system, almost as much as in Sweden today use credit cards.

The banks came up with the industrial revolution

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In the 18th and 1900s, however, the banks came up with the industrial revolution, and the market for person-to-person loans went back to being a minor thing between friends and family.

First with the Internet, person-to-person loans came back in the mid-00s, as a market that was not initially very regulated but with reliable trading venues. Among the first companies were British Zopa as well as American Lending Club and Prosper.

A large number of companies have entered the market

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Since then, a large number of companies have entered the market, and person-to-person loans via the Internet are now available in most national markets. And above all: Since 2014 also in Sweden via Good Finance. The oldest form of loans, they are the simplest ones! It’s all about people who need money being put in contact with those who have money.

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written by Benita Morris - Posted in Uncategorized